Habit Formation in Consumer Preferences: Evidence from Panel Data

2000 ◽  
Vol 90 (3) ◽  
pp. 391-406 ◽  
Author(s):  
Karen E Dynan
Keyword(s):  
Habit Formation ◽  
Consumer Preferences ◽  
Panel Study ◽  
Consumer Expenditure ◽  
Income Dynamics ◽  
Household Data ◽  
Consumer Expenditure Survey ◽  
Consumption Data ◽  
Food Consumption Data ◽  
Annual Frequency

This paper tests for the presence of habit formation using household data. A simple model of habit formation implies a condition relating the strength of habits to the evolution of consumption over time. When the condition is estimated with food consumption data from the Panel Study on Income Dynamics (PSID), the results yield no evidence of habit formation at the annual frequency. This finding is robust to a number of changes in the specification. It also holds for several proxies for nondurables and services consumption created by combining PSID variables with weights estimated from Consumer Expenditure Survey data. (JEL D12, D91, E21)

scholarly journals Estimates of Annual Consumption Expenditures and Its Major Components in the PSID in Comparison to the CE

2014 ◽  
Vol 104 (5) ◽  
pp. 132-135 ◽  
Author(s):  
Patricia Andreski ◽  
Geng Li ◽  
Mehmet Zahid Samancioglu ◽  
Robert Schoeni
Keyword(s):  
Data Collection ◽  
Panel Study ◽  
Household Surveys ◽  
Consumer Expenditure ◽  
Income Dynamics ◽  
Consumption Expenditures ◽  
Consumer Expenditure Survey ◽  
Expenditure Data ◽  
Annual Consumption ◽  
The Mean

Comprehensive data on consumption expenditures have historically not been collected in US longitudinal household surveys. The Panel Study of Income Dynamics (PSID) expanded its expenditure data collection in 1999 and 2005. We examine these new expenditure data, highlighting several unique features of the PSID data. We then compare the PSID expenditure data with those in the Consumer Expenditure Survey (CE). We document that the PSID data cover nearly the entire scope of the CE data, and the mean statistics of total expenditures compare favorably between the two surveys. However, significant differences remain for certain expenditure categories.

scholarly journals What Accounts for the Variation in Retirement Wealth Among U.S. Households?

2001 ◽  
Vol 91 (4) ◽  
pp. 832-857 ◽  
Author(s):  
B. Douglas Bernheim ◽  
Jonathan Skinner ◽  
Steven Weinberg
Keyword(s):  
Time Preference ◽  
Panel Study ◽  
Hyperbolic Discounting ◽  
Risk Tolerance ◽  
Wealth Accumulation ◽  
Consumer Expenditure ◽  
Income Dynamics ◽  
Consumer Expenditure Survey ◽  
Saving And Wealth ◽  
Retirement Wealth

Even among households with similar socioeconomic characteristics, saving and wealth vary considerably. Life-cycle models attribute this variation to differences in time preference rates, risk tolerance, exposure to uncertainty, relative tastes for work and leisure at advanced ages, and income replacement rates. These factors have testable implications concerning the relation between accumulated wealth and the shape of the consumption profile. Using the Panel Study of Income Dynamics and the Consumer Expenditure Survey, we find little support for these implications. The data are instead consistent with “rule of thumb,” “mental accounting,” or hyperbolic discounting theories of wealth accumulation. (JEL D1, D91, E21)

scholarly journals Consumption Inequality and Partial Insurance

2008 ◽  
Vol 98 (5) ◽  
pp. 1887-1921 ◽  
Author(s):  
Richard Blundell ◽  
Luigi Pistaferri ◽  
Ian Preston
Keyword(s):  
Panel Study ◽  
Consumer Expenditure ◽  
Income Shocks ◽  
Income Dynamics ◽  
Transitory Shocks ◽  
Poor Households ◽  
Permanent Shocks ◽  
College Educated ◽  
Imputation Procedure ◽  
Partial Insurance

This paper examines the link between income and consumption inequality. We create panel data on consumption for the Panel Study of Income Dynamics using an imputation procedure based on food demand estimates from the Consumer Expenditure Survey. We document a disjuncture between income and consumption inequality over the 1980s and show that it can be explained by changes in the persistence of income shocks. We find some partial insurance of permanent shocks, especially for the college educated and those near retirement. We find full insurance of transitory shocks except among poor households. Taxes, transfers, and family labor supply play an important role in insuring permanent shocks. (JEL D12, D31, D91, E21)

scholarly journals Revealed Preference Analysis with Normal Goods: Application to Cost-of-Living Indices

2020 ◽  
Vol 12 (3) ◽  
pp. 165-188
Author(s):  
Laurens Cherchye ◽  
Thomas Demuynck ◽  
Bram De Rock ◽  
Khushboo Surana
Keyword(s):  
Panel Study ◽  
Revealed Preference ◽  
Income Dynamics ◽  
Cost Of Living ◽  
Consumption Data ◽  
Normal Goods ◽  
The 2008 Financial Crisis ◽  
The Empirical Analysis ◽  
Revealed Preference Analysis

We present a revealed preference methodology for nonparametric demand analysis under the assumption of normal goods. Our methodology is flexible in that it allows for imposing normality on any subset of goods. We show the usefulness of our methodology for empirical welfare analysis through cost-of-living indices. An illustration to US consumption data drawn from the Panel Study of Income Dynamics (PSID) demonstrates that mild normality assumptions can substantially strengthen the empirical analysis. It obtains considerably tighter bounds on cost-of-living indices and a significantly more informative classification of better-off and worse-off individuals after the 2008 financial crisis. (JEL D11, D12, E31, G01)

scholarly journals Micro versus macro consumption data: the cyclical properties of the consumer expenditure survey

2013 ◽  
Vol 45 (26) ◽  
pp. 3778-3785 ◽  
Author(s):  
Rodolfo G. Campos ◽  
Iliana Reggio ◽  
Dionisio García-Píriz
Keyword(s):  
Consumer Expenditure ◽  
Consumer Expenditure Survey ◽  
Expenditure Survey ◽  
Consumption Data

Consumption Mobility in the United States: Evidence from Two Panel Data Sets

2006 ◽  
Vol 6 (1) ◽  
Author(s):  
Jonathan D Fisher ◽  
David S Johnson
Keyword(s):  
Social Welfare Function ◽  
Panel Study ◽  
Data Use ◽  
Well Being ◽  
The United States ◽  
Income Mobility ◽  
Data Sets ◽  
Consumer Expenditure ◽  
Income Dynamics ◽  
Total Consumption

Abstract This paper examines inequality and mobility using measures of income and consumption. Consumption is claimed to be a better measure of permanent income and thus well-being, but most studies of inequality and mobility using U.S. data use income.This paper uses cohort data from the Consumer Expenditure Surveys on total consumption to impute consumption in the Panel Study of Income Dynamics. Then, we use this imputed consumption and actual income from the PSID to examine changes in inequality and mobility. Similar to earlier findings, we show that there has been a large increase in income inequality but no concurrent increase in consumption inequality in the 1990s. Conversely, income mobility and consumption mobility are similar during this time period.Finally, we link the concepts of inequality and mobility using a social welfare function. The results suggest that income mobility and consumption mobility more than offset the increases in inequality.

The past, present and future of food consumption databases

2012 ◽  
Vol 153 (43) ◽  
pp. 1692-1700
Author(s):  
Viktória Szűcs ◽  
Erzsébet Szabó ◽  
Diána Bánáti
Keyword(s):  
Data Collection ◽  
Food Consumption ◽  
Age Groups ◽  
Collection Method ◽  
The Past ◽  
Consumption Data ◽  
Food Consumption Data ◽  
International Projects ◽  
Collection Methods ◽  
The Eu

Results of the food consumption surveys are utilized in many areas, such as for example risk assessment, cognition of consumer trends, health education and planning of prevention projects. Standardization of national consumption data for international comparison is an important task. The intention work began in the 1970s. Because of the widespread utilization of food consumption data, many international projects have been done with the aim of their harmonization. The present study shows data collection methods for groups of the food consumption data, their utilization, furthermore, the stations of the international harmonization works in details. The authors underline that for the application of the food consumption data on the international level, it is crucial to harmonize the surveys’ parameters (e.g. time of data collection, method, number of participants, number of the analysed days and the age groups). For this purpose the efforts of the EU menu project, started in 2012, are promising. Orv. Hetil., 2012, 153, 1692–1700.

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